Mining in focus
accordingly to reach redemption in the end.
“We will be redeemed, we will be cleansed,
and we will become a much better country, I
promise you that.”
Where to from here?
With elections over and a new cabinet in
place, it remains to be seen what results recent
political changes will have on the country and
how it will impact the mining industry.
The industry and investors alike had been
waiting for elections with bated breath to
decide on what the future would be for
mining in South Africa. Unsurprisingly, the
ANC won the elections, making Ramaphosa
president of the country. After a short delay,
he announced a new and reduced cabinet.
The cabinet was reduced from 36 to 28
ministers, with some departments being
dissolved while others were combined. The
DMR was combined with the Department
of Energy and is now the Department of
Mineral Resources and Energy. Mantashe
was appointed to head up the new
department with Bavelile Hlongwa as the
deputy. His appointment was embraced by
the industry. “The appointment of Minister
Mantashe to an enhanced portfolio of
minerals and energy is a key signal of
the seriousness with which the president
is taking the restoration of investor and
business confidence in mining and energy,”
www.miningmirror.co.za
commented Rodger Baxter, CEO of the
Minerals Council South Africa (MCSA).
Undoubtedly, the mining industry in South
Africa is not where it should be. This despite
Mining Charter III being finalised. Investors
still feel that the regulatory framework in the
industry is unattractive, seeking alternative
investment opportunities elsewhere on the
continent. Some mining companies, such
as AngloGold Ashanti, no longer see the
value of operating in South Africa. The gold
producer decided to disinvest by selling its
remaining gold mining assets in the country.
Some companies still see the potential
of mining in South Africa despite all the
political and economic uncertainties. During
the investment conference in October 2018,
many companies from different industries
(including mining) made pledges to invest
in the country. Vendanta, Ivanplats and
Anglo American were among the mining
companies that pledged R21.4-billion, R4.5-
billion and R2.5-billion respectively. In April
2019, Rio Tinto decided to also come to the
party with a R6.5-billion investment into
Richards Bay Minerals.
It seems as if the new dawn is yielding
positive results for the industry. According
to the Fraser Institute’s Annual Survey
of Mining Companies, South Africa’s
attractiveness with regards to mining policies
has moved up 27 spots in the world rankings,
coming in at 56 out of 83 countries surveyed.
This is a significant improvement compared
to 81 out of 91 in 2017. The country has also
seen improvements in terms of investment
attractiveness, which is now 43 out of 83
compared to 48 out of 91. “This shows that
working together with stakeholders in the
sector, it is possible to realise South Africa’s
potential of being in the top 20 in terms of its
attractiveness to the investment community,”
commented Mantashe.
The outcome of the investor conference
and feedback from the annual survey shows
that the country and industry are moving in
the right direction and investor confidence
in the mining industry is gradually picking
up. This does not mean that the industry
can sit back and relax, as there is still a lot
of work to do, especially with regarding
regulatory frameworks in the mining
industry. One of the participants from
the survey said, “South Africa’s revised
Mining Charter continues to be an absolute
deterrent for exploration companies.”
Another participant expressed their
dissatisfaction at the rules around mining
ownership, saying that they discouraged
investment.
Going forward, the industry can use the
feedback it receives and use it to make the
necessary changes that will return South
Africa’s mining glory days. To achieve this,
continued collaboration from stakeholders
across all areas of mining will be required.
AUGUST 2019 MINING MIRROR [33]